Nomura Research Institute

236th NRI Media Forum

The 2030 Housing Market ~An Increase in the Mobile Population is the Key to Invigorating the Housing Market in an Era With a Declining Population~

June 7, 2016

Consulting Division Wataru Sakakibara, Senior consultant Akira Daido, Chief consultant Keita Kamei, Associate consultant Mitsuru Deguchi, Associate consultant Tomoki Yoshizawa, Consultant

Contents

1. Predictions on new housing starts and the renovation market scale (2016 version)

2. Predictions on the number of vacant homes (2016 version) 3. Predictions on existing home sales 4. Summary

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

2

Contents

1. Predictions on new housing starts and the renovation market scale (2016 version)

2. Predictions on the number of vacant homes (2016 version) 3. Predictions on existing home sales 4. Summary

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

3

Factors that impact new housing starts

Three factors have major impacts on new housing starts: 1) Mobile population, 2) Nominal GDP growth rate, and 3) Average age of housing stock. Population and number of households • • • •

Total population Working-age population Total number of households Number of households in which the head of household is of working age • Mobile population • Number of mobile households etc.

Economic growth • • • • • • • •

Real GDP Real GDP growth rate Real GDP for the previous year Real GDP growth rate for the previous year Nominal GDP Nominal GDP growth rate Nominal GDP for the previous year Nominal GDP growth rate for the previous year Etc.

Housing stock • • • •

Total housing stock Average age Number of vacant homes Vacancy rate etc.

Is it logically relevant as a factor impacting new housing starts? Can one say it impacts new housing starts statistically? Factors that impact new housing starts 1) Mobile population 2) Nominal GDP growth rate 3) Average age of housing stock Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

4

Future predictions on factors that impact new housing starts (1)

The mobile population is expected to decrease from 10.1 million people in 2015 to eight million people in 2030 Actual and predicted mobile population* (One million people) 14

Actual values (estimates) ←

12.6

→ Predicted values

12 10.1 10 8.0 8 6 4 2 0 1988

1995

2000

2005

2010

2015

2020

2025

2030

(Year)

* Mobile population: the number of people that moved to a new address in the applicable year

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

Source) Actual values: Estimates by NRI based on the annual report on the internal migration in Japan derived from the basic resident registers by the Ministry of Internal Affairs and Communications and Population Census Predicted values: Predictions by NRI based on the Population Projections for Japan by the National Institute of Population and Social Security Research. 5

Future predictions on factors that impact new housing starts (2)

Predictions by the Japan Center for Economic Research are used for the nominal GDP growth rate (Growth power is decreasing in the mid to long term, and an era of negative growth will start around 2030)

Actual and predicted nominal GDP growth rate （%)

9 8 7 6 5 4 3 2 1 0 -1 -2 -3 -4 -5

Actual values ←

→ Predicted values

2.1 1.5 -0.7

1988

1995

2000

2005

2010

2015

2020

2025

2030 (year)

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

Source) Actual values: System of National Accounts by the Cabinet Office Predicted values: Mid-term economic forecast (announced March 23, 2016) by the Japan Center for Economic Research

6

Future predictions on factors that impact new housing starts (3)

The average age of housing stock is expected to increase from 22 years in 2013 to 29 years in 2030  A decay curve was calculated, showing the degree of decrease after construction for housing stock according to the period in which construction was started (right chart).  The average age was calculated by calculating the housing stock according to the year in which construction was started, based on the decay curve (left chart).

Actual and predicted average age (Year)

Actual values (estimates) ←

→ Predicted values

30

Decay curve (Housing stock decrease rate by period in which construction was started) 1 0.9 0.8

25

0.7 0.6

1999～2003

0.5

15 10

0.4

1994～1998

0.3

1989～1993 1982～1988

0.2

5

0.1 0

0 1988

1995 2000 2005 2010 2015 2020 2025 2030 (year)

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

1971～1981 1961～1970

Period in which construction was started

20

～1960 Until 1960 1 5 10 15 20 25 30 35 40 45 50 55 60 Age (years)

Source) Estimates and predictions by NRI based on the new housing starts Statistics by the Ministry of Land, Infrastructure, Transport and Tourism and Housing and Land Statistics by the Ministry of Internal Affairs and Communications

7

New housing starts prediction results

New housing starts are expected to gradually decrease due to factors such as the decreasing population, decreasing number of households, and longer life of housing, totaling approximately 540,000 in 2030 Actual and predicted new housing starts (10,000 homes)

180

Actual values ← → Predicted values

166167167

163 156 151 142 148 134

160 140

134

Collapse of the bubble economy

120

100

123 121

125129 119

118

104

117 117 115 Last-minute

104 demand before the consumption tax increase Falsified + earthquake Reconstruction resistance data demand after the scandal Great Hanshin Revision of the Earthquake Building Standards Act

80 60 40

99 82 84

89

88

92

88

83 81 79 77 83 74 72 69 67 65 62 Last-minute 60 57 Bankruptcy demand before 54

78

of Lehman the consumption Brothers tax increase

20 0 1988

1995

2000

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

2005

2010

2015

2020

2025

2030 (year)

Source: Actual values: Construction starts statistics by the Ministry of Land, Infrastructure, Transport and Tourism Predicted values:NRI

8

Factors that impact the renovation market scale

Three factors have major impacts on the renovation market scale: 1) New housing starts (8 years ago), 2) Nominal GDP growth rate, and 3) Average age of the housing stock

Economic growth

Number of households • Total number of households • Number of households in which the head of household is of working age • Number of people moving • Number of households moving • New housing starts etc.

• • • • • • • •

Real GDP Real GDP growth rate Real GDP for the previous year Real GDP growth rate for the previous year Nominal GDP Nominal GDP growth rate Nominal GDP for the previous year Nominal GDP growth rate for the previous year Etc.

Housing stock quality • Average age • Number of vacant homes • Vacancy rate etc.

Is it logically relevant as a factor impacting the renovation market scale?

Can one say it impacts the renovation market scale statistically? Factors that impact the renovation market scale 1) New housing starts (8 years ago) 2) Nominal GDP growth rate 3) Average age of the housing stock Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

9

Renovation market scale prediction results Although growth is anticipated for the renovation market scale, expansion will be difficult if no measures are taken In addition to policy support, inventive approaches by private business operators will also be necessary to invigorate the market

Actual and predicted renovation market scale Broad sense (actual values)

(One trillion yen)

10

9.1 8.1 8.1

9 8 7

Broad sense (predicted values)

6.8 5.8

7.1 6.9

7.5

7.3 7.5 7.5 7.2 7.3 7.0 6.6

6.1

Narrow sense (actual values)

Actual values ← → Predicted values

6.8 6.26.0 6.1

6 5

5.3

4 3

3.4 3.6

4.1

5.7

4.4 4.2 4.5

5.4

5.0 5.1

5.3 5.2

5.6 5.4

Narrow sense (predicted values)

6.4

7.5 7.4 6.7 6.6 6.5 6.7

5.0

5.3 5.4

5.6

5.9 6.2

6.3 6.5

6.7 6.5 6.6 6.6

5.3 5.4

5.7 5.5 5.6 5.6 5.5 5.6 5.6 5.6 5.6 5.6

6.1 6.1 5.1

5.3

4.8 4.7 4.8

5.5 5.5

4.9 5.2

6.5 6.5 6.5 6.5 6.5 6.5

4.4

2 1 0 1989

1995

2000

2005

2010

2015

2020

2025

2030

(Year)

* Narrow sense: Building additions and reconstruction work included under “New housing” in the new housing starts statistics Broad sense: Renovation market scale in the narrow sense with the amount including the purchase expenses for durable consumer goods related to renovation (such as air conditioners and furniture), interior products, etc. Source) Actual values: Housing Renovation Market Scale (2014 Version) by the Center for Housing Renovation and Dispute Settlement Support. Predicted values: NRI Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

10

Contents

1. Predictions on new housing starts and the renovation market scale (2016 version)

2. Predictions on the number of vacant homes (2016 version) 3. Predictions on existing home sales 4. Summary

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

11

Prediction method

Predictions on the total Number of homes, number of vacant homes, and Vacancy rate utilize the following method Way of thinking for predicting the total Number of homes, number of vacant homes, and Vacancy rate

Total Number of homes five years ago

＋

Actual values：Statistical Survey on Housing and Land by the Ministry of Internal Affairs and Communications Predicted values：NRI

Number of new housing starts in the five years after

－

Number of demolished homes in the five years after

＝

Total number of homes

Predictions by NRI correlated with new housing starts

Predicted values by NRI

Vacancy rate

Number of vacant homes Total number of homes

－

Number of homes in which households live

＝

Number of homes in which no households live

Hypothesized to be the same level as future predictions by the National Institute of Population and Social Security Research

Number of homes under construction Number of homes with temporary residents only*

* homes in which not one person normally lives, such as those only used during the day or those in which several people take turns staying at night

Divided proportionally in approximation of past trends Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

12

Predictions on the total number of homes, number of vacant homes, and Vacancy rate

Together with the decreased number of households and increased total number of homes, the number of vacant homes is expected to be roughly 21.67 million in 2033 with a vacancy rate of 30.4% Actual and predicted total number of homes, number of vacant homes, and vacancy rate （％)

(10,000 homes)

8,000

Actual values ←

7,000 5,759

6,000

6,063

6,367

6,646

7,126 30% 25%

25.7%

4,588 3,545

20%

21.1%

3,861

15%

16.9%

Vacancy rate

Total number of homes and number of vacant homes

5,389 4,201

4,000

6,900

30.4%

5,025 5,000

35%

→ Predicted values

3,000 11.5% 12.2%

2,000 1,000

7.6% 268

8.6% 330

13.1% 13.5%

9.4% 9.8% 394

448

576

659

2,167 1,773

757

820

1,078

10%

1,404 5% 0%

0

1978 1983 1988 1993 1998 2003 2008 2013 2018 2023 2028 2033 (Year) Number of Vacant Homes (lefthand scale)

Total Number of Homes (lefthand scale)

Vacancy Rate (right-hand scale)

Copyright（C) Nomura Research Institute, Ltd. All rights reserved. Source) Actual values：Statistical Survey on Housing and Land by the Ministry of Internal Affairs and Communications Predicted values：NRI

13

Predictions on the breakdown of vacant homes and ratio in the total Number of homes

The breakdown of vacant homes is approximately 12.7 million homes for rental or sale in 2033, accounting for 17.8% of the total Number of homes, and roughly 7.9 million other homes (those with no particular usage), accounting for 11.0%  It is thought that other homes will continue increasing if homes are not demolished or downsized, and the falling number of households will lead to more homes for rental or sale. Actual and predicted breakdown of vacant homes and ratio in the total number of homes (10,000 homes)

（％) 20%

1,400

18%

Actual values←→Predicted values

16%

Number of homes

1,000

14% 12%

800

10% 600

8% 6%

400

4% 200

2%

0

Ratio in the total Number of homes

1,200

0% 1978

1983

1988

1993

1998

2003

2008

2013

2018

2023

2028

2033 （年)

Number of secondary homes (left-hand ※別荘他 scale)

Number of homes for rental or sale (left-hand scale)

Number of other homes (left-hand scale)

Ratio of secondary homes (right-hand scale)

Ratio of homes for rental or sale (right-hand scale)

Ratio of other homes (right-hand scale)

Copyright（C) Nomura Research Institute, Ltd. All rights reserved. Source) Actual values：Statistical Survey on Housing and Land by the Ministry of Internal Affairs and Communications Predicted values：NRI

14

Contents

1. Predictions on new housing starts and the renovation market scale (2016 version)

2. Predictions on the number of vacant homes (2016 version) 3. Predictions on existing home sales 4. Summary

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

15

Prediction method existing home sales were estimated and predicted based on information about the number of households and changes in the home ownership ratio from external data, as well as the percentage of people buying a house for the first time and percentage of people buying existing homes from NRI’s own surveys

Population Census (Ministry of Internal Affairs and Communications),

Household Projections for Japan (National Institute of Population and Social Security Research)

(A) Number of households by age of head of household (five-year age segment)

Statistical Survey on Housing and Land

NRI's questionnaire surveyNote) (of homebuyers)

(Ministry of Internal Affairs and Communications)

Note) An overview of the questionnaire survey is as follows. • Online survey (name: Survey on Housing Acquisition) • Targets: 9,204 men and women age 25 to 59 across Japan who purchased a home each year from 2000 • Period: April 22 - 28, 2016

(B) Changes in the home ownership ratio by age of head of household (fiveyear age segment)

(C＝A×B) Number of households purchasing a home for the first time in the applicable period

(D) Among all households purchasing a home, the percentage of households purchasing a home for the first time (F) Among all households purchasing a home, the percentage of households purchasing an existing home

(E＝C÷D) Total number of households purchasing a home

(not newly built)

(G＝E×F) Existing home sales Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

16

existing home sales estimation and prediction method (1) Population Census (Ministry of Internal Affairs and Communications),

Household Projections for Japan (National Institute of Population and Social Security Research)

(A) Number of households by age of head of household (five-year age segment)

Statistical Survey on Housing and Land

NRI's questionnaire surveyNote) (of homebuyers)

(Ministry of Internal Affairs and Communications)

Note) An overview of the questionnaire survey is as follows. • Online survey (name: Survey on Housing Acquisition) • Targets: 9,204 men and women age 25 to 59 across Japan who purchased a home each year from 2000 • Period: April 22 - 28, 2016

(B) Changes in the home ownership ratio by age of head of household (fiveyear age segment)

(C＝A×B) Number of households purchasing a home for the first time in the applicable period

(D) Among all households purchasing a home, the percentage of households purchasing a home for the first time (F) Among all households purchasing a home, the percentage of households purchasing an existing home

(E＝C÷D) Total number of households purchasing a home

(not newly built)

(G＝E×F) Existing home sales Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

17

(A) Number of households by age of head of household (five-year age segment)

The number of households is expected to peak in 2019 and then declines to around 51 million in 2030 Actual and predicted number of households (by age of head of household [five-year segment]) (10,000 households) Actual values ←

6,000

→ Predicted values

5,307

5,123

5,000



75歳以上 75 and older 70～74歳 70 – 74 65～69歳 65 – 69

4,000

60～64歳 60 – 64 55～59歳 55 – 59

3,000

50 – 54 50～54歳 45 – 49 45～49歳 40 – 44 40～44歳

2,000

35 – 39 35～39歳 30 – 34 30～34歳 25 – 29 25～29歳

1,000

25 or younger 25歳未満

0 2005

2010

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

2015

2020

2025

2030

(Year)

Source) Actual values: Population Census by the Ministry of Internal Affairs and Communications Predicted values: Household Projections for Japan by the National Institute of Population and Social Security Research

18

(B) Changes in the home ownership ratio by age of head of household (five-year age segment) The home ownership ratio from 2018 on is assumed to be the same as 2013 The home ownership ratio for the demographic of people who were under age 25 in the 2003 survey is expected to increase to roughly 46% in 2018

Actual and predicted home ownership ratio (by age of head of household [five-year segment]) Actual values ←

(%)

→ Predicted values



100% 100

75 and older 70 - 74

80% 80

65 - 69 55 - 59 50 - 54 45 - 49

60% 60

40 - 44

45.8%

35 - 39

40% 40 28.5%

17.3pt increase 30 - 34

20% 20

11.5% 2.7%

17.0pt increase 25 - 29

8.8pt increase

25 and younger

0 0% 2003

2008

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

2013

2018

2023

2028

2033 (Year)

Source) Actual values: Statistical Survey on Housing and Land by the Ministry of Internal Affairs and Communications (2003, 2008, 2013) Predicted values: NRI

19

(C) Number of households purchasing a home for the first time in the applicable period

The cumulative number of households purchasing a home for the first time is expected to reach approximately 2.75 million (yearly average of 550,000) for the five-year period from 2026 to 2030 Actual and predicted number of households purchasing a home for the first time (five-year cumulative number) (Five-year cumulative number, 10,000 households)

350 300 250 200 150 100 50 0 2006-2010

2011-2015

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

2016-2020

2021-2025

2026-2030 (Year)

Source: Population Census, Population Estimates by the Ministry of Internal Affairs and Communications, Household Projections for Japan by the National Institute of Population and Social Security Research, Statistical Survey on Housing and Land by the Ministry of Internal Affairs and Communications

20

existing home sales estimates and estimate method (2) Population Census (Ministry of Internal Affairs and Communications),

Household Projections for Japan (National Institute of Population and Social Security Research)

(A) Number of households by age of head of household (five-year age segment)

Statistical Survey on Housing and Land

NRI's questionnaire surveyNote) (of homebuyers)

(Ministry of Internal Affairs and Communications)

Note) An overview of the questionnaire survey is as follows. • Online survey (name: Survey on Housing Acquisition) • Targets: 9,204 men and women age 25 to 59 across Japan who purchased a home each year from 2000 • Period: April 22 - 28, 2016

(B) Changes in the home ownership ratio by age of head of household (fiveyear age segment)

(C＝A×B) Number of households purchasing a home for the first time in the applicable period

(D) Among all households purchasing a home, the percentage of households purchasing a home for the first time (F) Among all households purchasing a home, the percentage of households purchasing an existing home (not newly built)

(E＝C÷D) Total number of households purchasing a home

(G＝E×F) Existing home sales Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

21

(D) Among all households purchasing a home, the percentage of households purchasing a home for the first time

The percentage of households purchasing a home for the first time in 2016 or later is estimated to be 77%, which is the average value calculated based on the results of a survey of homebuyers who purchased a home in 2000 or later Percentage of households purchasing a home for the first time among all households purchasing a home First purchase 初めて購入

Second or further purchase 2回目以降の購入

Average 平均値value

(%)

100 100%

The average value (76.7%) for the results of a questionnaire survey of homebuyers in each year from 2000 to 2015

80 80%

60 60%

40% 40

20% 20

0% 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (Year) Year of home purchase Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

Source) Questionnaire survey by NRI

22

（E) Total number of households purchasing a home

The cumulative total number of households purchasing a home is expected to reach approximately 3.6 million (yearly average of 720,000) for the five-year period from 2026 to 2030 Actual and predicted total number of households purchasing a home (five-year cumulative number) (Five-year cumulative number, 10,000 households)

450 400 350 300

Total number of households purchasing a home

250 200 150 100

(Reproduced)

Number of households purchasing a home for the first time

50 0 2006-2010

2011-2015

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

2016-2020

2021-2025

2026-2030

(Year)

Source: Population Census, Population Estimates by the Ministry of Internal Affairs and Communications, Household Projections for Japan by the National Institute of Population and Social Security Research, Statistical Survey on Housing and Land by the Ministry of Internal Affairs and Communications, questionnaire survey by NRI

23

existing home sales estimation and prediction method (3) Population Census (Ministry of Internal Affairs and Communications),

Household Projections for Japan (National Institute of Population and Social Security Research)

(A) Number of households by age of head of household (five-year age segment)

Statistical Survey on Housing and Land

NRI's questionnaire surveyNote) (of homebuyers)

(Ministry of Internal Affairs and Communications)

Note) An overview of the questionnaire survey is as follows. • Online survey (name: Survey on Housing Acquisition) • Targets: 9,204 men and women age 25 to 59 across Japan who purchased a home each year from 2000 • Period: April 22 - 28, 2016

(B) Changes in the home ownership ratio by age of head of household (fiveyear age segment)

(C＝A×B) Number of households purchasing a home for the first time in the applicable period

(D) Among all households purchasing a home, the percentage of households purchasing a home for the first time (F) Among all households purchasing a home, the percentage of households purchasing an existing home (not newly built)

(E＝C÷D) Total number of households purchasing a home

(G＝E×F) Existing home sales Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

24

(F) Among all households purchasing a home, the percentage of households purchasing an existing home (not newly built)

Assuming that the trend of increase from 2000 to 2015 will continue in 2016 and after, the percentage of households buying existing homes other than newly built homes will reach approximately 48% in 2030  The ratio of people choosing existing homes is expected to continue increasing due to improved competitive power for existing homes (quality, location, etc.) and consumer changes (values, income, etc.) in recent years (although there is still a major disparity compared to Europe and the United States). Actual and predicted percent of households purchasing an existing home (not newly built) among all households purchasing a home

Actual values ← (estimates)

（%)

60 60%

Possibility of sudden fluctuation caused by the Great East Japan Earthquake

50% 50 40% 40

→ Predicted values US (2014): 83.1% 47.8% UK (2012): 88.0%

Possibility of sudden fluctuation caused by the bankruptcy of Lehman Brothers

30% 30 28.8% 20% 20

Linear approximation based on the results of a questionnaire survey of homebuyers in each year from 2000 to 2015 (Determination coefficient: R2=0.96) * However, 2010 and 2012 were excluded from the linear approximation due to the assumption that they were sudden fluctuations

10% 10 0% 0 2000

2005

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

2010

2015

2020

2025

2030 (Year)

Source) Questionnaire survey by NRI

25

(G) existing home sales

Existing home sales are expected to continue increasing because of improved competitive power for existing homes and consumer changes, reaching approximately 340,000 in 2030  Even if existing home sales increase favorably as NRI predicts, they will still be approximately 130,000 homes short of the existing home sales policy objective (double the amount of 2013 by 2025) in the Basic Housing Plan (Cabinet decision of March 2016).

Actual and predicted existing home sales (10,000 units)

Actual values ← (estimates)

50

→ Predicted values

40

Policy objective for existing home sales (Double the amount of 2013)

Approximately 130,000 homes

30

20 30.7

33.6

2025

2030 (Year)

22.1

10

0 2005

2010

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

2015

2020

Source: Population Census, Population Estimates by the Ministry of Internal Affairs and Communications, Household Projections for Japan by the National Institute of Population and Social Security Research, Statistical Survey on Housing and Land by the Ministry of Internal Affairs and Communications, questionnaire survey by NRI

26

(Reference) Actual and predicted frequency of switching residences

An increase in the mobile population (moving, switching residences, replacement purchasing, etc.) is essential for achieving the approximately 130,000 homes required to meet the existing home sales target in an era with a declining population and number of households  Even if it is assumed that an increase in the mobile population will contribute only to existing home sales, it will be necessary to increase the mobile population by 20% (from approximately 8.72 million to approximately 10.09 million people).  Note) However, even though an increase in the mobile population should impact new housing starts as well as existing home sales, specific quantification is not performed for these estimates.

Relationship between house sales and mobile population Home sales (units) If no measures are taken

New Existing construc homes tion (units) (units)

Mobile population (people)

980,000 670,000 310,000 8.72 million ＋130,000 units

If the existing home sales objective is met

1.11 670,000 million

440, 000

1.2 times 10.09 million

Note) A simple existing home sales calculation method was established based on the mobile population and nominal GDP, and the mobile population was estimated if existing home sales total 1.11 million. Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

27

(Reference) Actual and predicted frequency of switching residences Assuming that existing home sales of approximately 130,000 homes are achieved due to an increase in the mobile population (moving, switching residences, replacement purchasing, etc.), one person must move, switch residences, engage in replacement purchasing, etc. 7.1 times in his or her lifetime (around the 2009 level) Actual and predicted residence switching frequency

Actual and predicted mobile population (100 million people) 1.4

Actual values ←

(assuming an average life expectancy of 85)

(10,000 people) (Times) → Predicted values 1,400 9.0

1,200

1.2

The required mobile population is 10.09 million 1,000

1.0 Total population (left-hand scale) 総人口（左目盛）

800

Mobile population (right-hand scale) 移動人口（右目盛）

0.6

600

0.4

400

Mobile population

Total population

0.8

Actual values ← (estimates)

200

0 0.0 1990 1995 2000 2005 2010 2015 2020 2025 Source) Actual values: Estimates by NRI based on the annual report on the internal migration in Japan derived from the basic resident registers by the Ministry of Internal Affairs and Communications and Population Census Predicted values: Predictions by NRI based on the Population Projections for Japan by the National Institute of Population and Social Security Research

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

Moving, switching residences, replacement purchasing, etc. is required 7.1 times per lifetime (once every 12 years)

8.0

7.0

6.0 0.2

→ Predicted values

If no measures are taken, the residence switching frequency is expected to decrease, reaching 6.1 times per lifetime (once every 14 years) in 2025

5.0 1990

1995

2000

2005

2010

2015

2020

2025

Source) NRI

28

Contents

1. Predictions on new housing starts and the renovation market scale (2016 version)

2. Predictions on the number of vacant homes (2016 version) 3. Predictions on existing home sales 4. Summary

Copyright（C) Nomura Research Institute, Ltd. All rights reserved.

29

Summary 

New housing starts, which totaled 920,000 in 2015, are expected to decrease to approximately 540,000 in 2030. It will be difficult to expand the scale of the renovation market, where growth is hoped for, without taking any measures to that end. This market is predicted to level off at approximately six trillion yen (in the broad definition) by 2030.



NRI predicts that, if existing homes are not demolished or effectively used for non-residential purposes, the number of vacant homes will reach roughly 21.7 million in 2033, and the Vacancy rate will reach 30.4%, both of which are increases.



Anticipating an impending era of full-scale decreases in population and the number of households, there is concern about a long-term slump in the housing market. However, existing home sales are predicted to increase to approximately 220,000 in 2013, 310,000 in 2025, and 340,000 in 2030, which is one reason for a positive outlook.



However, even if existing home sales increase favorably as NRI predicts, they will not meet the policy objective (double the amount of 2013 by 2025) in the Basic Housing Plan (Cabinet decision of March 2016).



An increase in the mobile population (moving, switching residences, replacement purchasing, etc.) is essential for further invigorating existing home sales in an era with a declining population and number of households. To that end, initiatives such as the following are necessary.





Establishing valuation systems for existing homes and enhancing loans for existing homes and renovations



Creating an environment that facilitates trial moving, residences in multiple regions, etc.



New business creation by private business operators (businesses to support moving, switching residences, replacement purchasing, etc.)

NRI believes that an increase in the mobile population in an ageing society will have effects such as creating an environment in which people can choose optimum housing depending on their life stage, as well as the qualitative improvement of residential environments for consumers.

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